CHEYENNE — Microsoft will start work this summer on a $112 million data center near Cheyenne, Gov. Matt Mead and state business officials announced Monday.
State business officials said the facility will generate hundreds of millions of dollars for the Cheyenne area economy, create approximately 40 jobs, and is a key step forward in diversifying Wyoming’s economy.
The Redmond, Wash.-based multinational corporation expects to have the facility operational in the spring of 2013, according to a governor’s office media release.
Microsoft chose Cheyenne over another, undisclosed location in the Mountain West, according to Randy Bruns, chief executive of Cheyenne LEADS, the city’s economic development organization.
Wyoming Business Council CEO Bob Jensen said Laramie, Rawlins and Evanston were also initially considered for the center.
The state has approved $10.7 million in grants to subsidize the data center’s electricity and broadband Internet for its first five years, as well as pay for infrastructure improvements, such as clearing the land and building roads to the data center.
State officials said that investment will be amply repaid. Initial Business Council projections forecast that the data center would have an economic impact of more than $140 million, though Bruns said Monday that the actual impact will likely be far greater than that.
Even with the grant money and data center sales tax breaks, Microsoft will pay $25 million in taxes during the first 10 years alone, Mead said.
The center also allows Wyoming to capitalize on its ample amounts of cheap electricity and keep young people from leaving the state, Bruns said.
“We’ve been exporting electricity ... and exporting young, skilled people,” Bruns said. “And this project is one piece of a strategy to use some of that power here and to begin to, if not export young people, perhaps even import some skills.”
Most of the jobs created will be in construction to erect the new building, Bruns said. When completed, the data center will be staffed by 15 full-time employees, he said.
Bruns said Microsoft plans to hire locally “to the fullest extent possible,” though some out-of-state workers may be brought in for key roles.
A Microsoft spokeswoman declined to comment Monday on why the company chose Cheyenne and what type of information it plans to store at the new data center.
‘Now in the big leagues’
Monday’s announcement is the most prominent result to date of a concerted effort by state and local officials to lure data centers to Wyoming.
Several other data centers have mushroomed in the Cheyenne area in recent years, as tech companies are attracted to the access to nearby transcontinental fiber optic lines, abundant electricity and a dry, cool climate that lowers air-conditioning bills.
The nearly completed National Center for Atmospheric Research supercomputing facility has also played a key role in putting Cheyenne on the map for data centers, business officials have said. Business Council officials said last month that the Microsoft data center will be built next to the NCAR facility west of Cheyenne.
In addition, state and local policymakers have established an array of tax incentives and grant programs to entice data centers to locate in the area.
Not every effort is successful. In June, Verizon scrapped plans to build a $4 billion data center north of Laramie.
But longtime Cheyenne economist Dick O’Gara, founder and president of the Wyoming Center for Business and Economic Analysis, said with Microsoft coming to Cheyenne, Wyoming now has a great example of how that work has paid off.
“That really says — in my mind, anyway — that, ‘OK, we are now in the big leagues, playing with the big boys,’” O’Gara said.
Data centers don’t create many jobs, O’Gara said. Where the real benefits come to the community, he said, is from taxes — property taxes on the building as well as sales taxes from electrical usage and the equipment, even with the state tax breaks.
Mead and state business officials said they believe a marquee name such as Microsoft will help them attract other prospective data center companies to build in Wyoming.
“I think we are at the starting place,” Mead said. “We have great momentum, I think, going forth.”